Receive and file the Yolo County Treasurer's Report on Investments for the quarter ended September 30, 2023. (No general fund impact) (Haynes/Xiong)

Receive and file the Yolo County Treasurer's Report on Investments for the quarter ended September 30, 2023.

The County Treasury investment portfolio is summarized in Attachment A (Investment Summary) and includes the Treasurer's Investment Pool and the investment accounts managed by the Treasury that are not pooled together for investment returns. The pooled portfolio includes county funds, deposits from special districts, and school districts totaling $801.7 million as of September 30, 2023.

The portfolio consisted of 1.2% ($9.9 million) in cash at bank, 41.8% ($334.9 million) in short-term investments in government investment pools, such as the Local Agency Investment Fund (LAIF) and the California Asset Management Program (CAMP), and 57% ($456.8 million) in an investment pool that is actively managed by professional investment advisor PFM Asset Management, LLC (PFM). These investments consist mostly of fixed income securities as authorized by government code, such as: U.S. Treasuries; securities issued by federal agencies, such as Fannie Mae, Freddie Mac, and Federal Home Loan Bank; corporate notes; commercial papers; and certificates of deposit.

The detail of investment in the pooled portfolio along with the investment performance are shown in Attachment B (PFM Performance Report) while the non-pooled holdings is shown in Attachment C (Non-pooled Holdings).  The non-pooled portfolio of $98.3 million consists of specific investments for various entities and programs. These include $25.1 million in government medium-term funds (LAIF and CAMP) for various districts and the 2017 Lease Revenue Bonds, $28.3 million in investments managed by PFM for various county programs (Landfill Closure, Cache Creek, etc.), $44.9 million in section 115 trusts held by PARS for County OPEB (Other Post Employment Benefits) and pension funding, and $44.9 thousand in cash in money market accounts.

In their quarterly investment review for the 3rd quarter of calendar year 2023, PFM continued to monitor the activities of the Federal Reserve, noting a pause on interest rate hikes in September after more than a year of rate hikes. The policymaker’s inclination to keep rates high for an extended period suggest that they remain concerned that inflation might not be falling fast enough toward their 2% target. Projections released by the Federal Open Market Committee signal one more rate hike this year. PFM will continue to evaluate all opportunities as they seek to safely add value to the County’s portfolio while maintaining a strong sense of safety and risk management. The County’s portfolio is aligned with a 1-5 year benchmark strategy.

CASH BALANCES
Attachment D (Cash Balances) depicts the cash balances of the three major operation funds of the County, and their combined balance. On September 30, 2023 this unaudited balance was $65.6 million, which decreased by $10.4 million from the prior quarter driven by net operating revenues and expenditures.

Other agencies having deposits in the pool include: school districts, special districts and cities. A copy of the report is posted and available on the Department of Financial Service's website. The Financial Oversight Committee reviews investment performance quarterly. All reports from the County's investment advisor PFM Asset Management LLC are available in the County Treasurer's office.

Not applicable.